It’s nearly impossible to click through to Bloomberg or another financial news site without being inundated with analysis predicting the next rate hike by the Federal Reserve.  Everything seems to be tied back to the potential for higher rates, and current 30-day Federal Funds futures put the odds at 65.6% that the central bank will hike by at least 25 basis points at its December meeting. #-ad_banner-#Volatility has spiked several times this year on investor fears of higher borrowing costs. The VIX volatility index spiked 88% in June when economic reports suggested higher rates were coming. Volatility jumped again, rising… Read More

It’s nearly impossible to click through to Bloomberg or another financial news site without being inundated with analysis predicting the next rate hike by the Federal Reserve.  Everything seems to be tied back to the potential for higher rates, and current 30-day Federal Funds futures put the odds at 65.6% that the central bank will hike by at least 25 basis points at its December meeting. #-ad_banner-#Volatility has spiked several times this year on investor fears of higher borrowing costs. The VIX volatility index spiked 88% in June when economic reports suggested higher rates were coming. Volatility jumped again, rising 52% in the third week of September, and then did so a third time this month.  All three surges in volatility have been met with a sell-off in stocks. But investors may be missing one very important point about rate hikes. It’s something only the economists know and something that could change the way you invest over the next several years. Understanding The Whole Rate Cycle, Not Just The Hike The watch for higher rates has turned into a Wall Street nail-biter as the market rises and falls with each piece of economic data or speech by a member… Read More

As the broader market bull looks ready to be put out to pasture, one beaten-down group may be about to turn higher.  Since we’re looking at the early stages of a potential multiyear uptrend for the sector, traders who get in now could see substantial gains. And one market leader that is trading at fire-sale prices and throws off a 5% dividend yield could be the perfect way to play this turnaround. #-ad_banner-#​Cycles Always Come Full Circle Agriculture is one of my favorite long-term themes, with global food demand set to outpace production capacity. This will drive the need… Read More

As the broader market bull looks ready to be put out to pasture, one beaten-down group may be about to turn higher.  Since we’re looking at the early stages of a potential multiyear uptrend for the sector, traders who get in now could see substantial gains. And one market leader that is trading at fire-sale prices and throws off a 5% dividend yield could be the perfect way to play this turnaround. #-ad_banner-#​Cycles Always Come Full Circle Agriculture is one of my favorite long-term themes, with global food demand set to outpace production capacity. This will drive the need for fertilizers — an extremely cyclical sector that has finally started to rebound. Fertilizer producers have felt a lot of pain over the past several years. Booming capacity in China was one culprit, as it led to price pressure from imports. Another was lower crop prices, due in part to record high harvests, which weakened demand for fertilizer. However, it looks like these pressures are set to ease, leaving U.S. fertilizer producers primed for a rebound.  Shares of CF Industries (NYSE: CF), the largest nitrogen fertilizer producer in North America, are more than 65% off their 2015 highs. But they are set… Read More

Third quarter earnings have begun to come in, and an end to the five-quarter earnings recession for companies in the S&P 500 isn’t likely. Investors have continued to bid up stocks on the hope that earnings could rebound this quarter and that higher profits would overcome the wave of geopolitical and economic hurdles facing the market. But can the market continue higher without an earnings turnaround? If revenue and profits fail to grow as expected, how long can investors rationalize valuations well above historical averages? #-ad_banner-#I’m always looking for quality names and value, but put my search into overtime when… Read More

Third quarter earnings have begun to come in, and an end to the five-quarter earnings recession for companies in the S&P 500 isn’t likely. Investors have continued to bid up stocks on the hope that earnings could rebound this quarter and that higher profits would overcome the wave of geopolitical and economic hurdles facing the market. But can the market continue higher without an earnings turnaround? If revenue and profits fail to grow as expected, how long can investors rationalize valuations well above historical averages? #-ad_banner-#I’m always looking for quality names and value, but put my search into overtime when I start asking these questions. If the market fails to get all it wanted out of earnings season, companies that have proven their business models through good times and bad may be the only safe investments in the ensuing selloff. Can The Market Break Its Earnings Recession? Alcoa (NYSE: AA) shocked the market last Tuesday missing on both sales and earnings, as questions arise about whether companies in the S&P 500 can break their long-running earnings drought. The miss sent shares tumbling more than 11%, while the S&P 500 fell by 1.25%, for its biggest daily drop in a… Read More

Geopolitical issues have dominated the markets this year, and polls have been useless in lending any kind of certainty to asset prices. OPEC has successfully managed expectations for a production freeze, even if an eventual deal is still unlikely, which has driven oil prices to nearly double since their February lows. Few would have predicted in January the momentum of the Trump campaign and the potential uncertainty on global trade. #-ad_banner-#As important as these events have been, however, 2016 will likely be remembered for one event in particular.  A referendum that most polls predicted would fail has forced a massive… Read More

Geopolitical issues have dominated the markets this year, and polls have been useless in lending any kind of certainty to asset prices. OPEC has successfully managed expectations for a production freeze, even if an eventual deal is still unlikely, which has driven oil prices to nearly double since their February lows. Few would have predicted in January the momentum of the Trump campaign and the potential uncertainty on global trade. #-ad_banner-#As important as these events have been, however, 2016 will likely be remembered for one event in particular.  A referendum that most polls predicted would fail has forced a massive selloff in one of the world’s top currencies, and has put in doubt the future of one of its largest economies. As is always the case, investors have rushed to the exits in this environment of economic uncertainty. When the dust settles, though, it may turn out to be one of the year’s best trades. Investors Fearfully Look To The Future Of The UK The British pound is now the worst performing currency of the year, down nearly 16% this year and to its lowest level in 31 years against the U.S. dollar. A flash crash of 6% in… Read More

Stephen King’s The Lawnmower Man was adapted for the big screen in 1992, the story of a disabled landscaper hooked up to a virtual reality landscape and experimental drugs. The VR experiment boosted the title character’s intelligence exponentially and even helped him talk to the opposite sex.  I watched this moving having just turned 16 years old, and I would be forever hooked on the potential of virtual reality. #-ad_banner-#VR and augmented reality have remained more fiction than fact — until recently. The 2012 Kickstarter campaign for headset maker Oculus Rift raised millions but still lacked the software development to… Read More

Stephen King’s The Lawnmower Man was adapted for the big screen in 1992, the story of a disabled landscaper hooked up to a virtual reality landscape and experimental drugs. The VR experiment boosted the title character’s intelligence exponentially and even helped him talk to the opposite sex.  I watched this moving having just turned 16 years old, and I would be forever hooked on the potential of virtual reality. #-ad_banner-#VR and augmented reality have remained more fiction than fact — until recently. The 2012 Kickstarter campaign for headset maker Oculus Rift raised millions but still lacked the software development to complete the experience. Software and hardware are now coming together and the momentum could create a market to rival the iPhone.  The coming technological leap in consumer electronics could turn a decades long dream into reality… and I’ve found three companies that could benefit big time. This Tech Revolution Is Nearly A Reality Virtual reality and augmented reality (AR) are developing fastest in gaming and entertainment but potential uses can be found in nearly every sector from battlefield training for the troops to buying a home.  There are more than 1.2 billion gamers in the world, an easy market… Read More

Headline risks can strike at any time and can hit even the best investments. Most companies have felt the pain of a news story that sent shares plunging, and when the issue results in little more than a humiliation for management, it can turn out to be an opportunity for investors. #-ad_banner-#That’s the case with my favorite bank stock, Wells Fargo (NYSE: WFC), which is the largest bank in the country by deposits and underwrites more than a third of the nation’s home loans. The bank’s focus on lending rather than asset management has helped it outperform other large banks… Read More

Headline risks can strike at any time and can hit even the best investments. Most companies have felt the pain of a news story that sent shares plunging, and when the issue results in little more than a humiliation for management, it can turn out to be an opportunity for investors. #-ad_banner-#That’s the case with my favorite bank stock, Wells Fargo (NYSE: WFC), which is the largest bank in the country by deposits and underwrites more than a third of the nation’s home loans. The bank’s focus on lending rather than asset management has helped it outperform other large banks with nearly 60% of its $1.7 trillion in balance sheet assets in consumer and business loans. News broke in early September that more than 2.1 million fake deposit and credit card accounts had been opened by employees of the bank. This was done primarily as a way to meet high quotas for cross-selling products, and only about 5% of the fake accounts generated any fee income, which totaled $2.4 million. Aggressive cross-selling of products is nothing new in banking. The problem is that Wells didn’t have the oversight structures in place to catch employees committing the fraud.  — Recommended Link… Read More

You can’t be a little pregnant, and you can’t have a little inflation. It’s the old axiom about rising prices that the market seems to have forgotten over the last several years. Stubbornly weak economic growth and deflationary pressure on global trade from low-cost producers in Asia have kept U.S. inflation well under the Federal Reserve’s 2% target since April 2012. The benign threat of higher prices has emboldened the central bank to keep rates low and money cheap. But there’s a growing disconnect between the Fed’s preferred measure of inflation and others. #-ad_banner-#In fact, another measure of inflation points… Read More

You can’t be a little pregnant, and you can’t have a little inflation. It’s the old axiom about rising prices that the market seems to have forgotten over the last several years. Stubbornly weak economic growth and deflationary pressure on global trade from low-cost producers in Asia have kept U.S. inflation well under the Federal Reserve’s 2% target since April 2012. The benign threat of higher prices has emboldened the central bank to keep rates low and money cheap. But there’s a growing disconnect between the Fed’s preferred measure of inflation and others. #-ad_banner-#In fact, another measure of inflation points to price increases that are 70% higher than the rate the Fed is watching. Combine that with the fact that prices on one of the biggest downward factors on recent inflation are surging and the market may soon be reminded of what it’s like to have a ‘little’ inflation. Is The Fed Looking In The Wrong Place? Several regional Fed presidents have expressed concern about rising inflation and the need to raise interest rates. Philly Fed President Harker told Bloomberg in late September that rising energy prices have convinced him that we will see target inflation, “sooner rather than… Read More

Amazon (NYSE: AMZN) booked more than $107 billion in 2015 sales on over 300 million active customer accounts. The ecommerce giant is booking 20% annual sales growth as traditional retailers struggle and is predicted to surpass Macy’s (NYSE: M) as America’s top apparel seller next year. Analysts at Morgan Stanley found that the department store share of the apparel market has fallen by $30 billion over the last decade while Amazon and other online retailers have picked up over $28 billion in market share over the same period. #-ad_banner-#Retailers like Sears (Nasdaq: SHLD) and J.C. Penney (NYSE: JCP) have all… Read More

Amazon (NYSE: AMZN) booked more than $107 billion in 2015 sales on over 300 million active customer accounts. The ecommerce giant is booking 20% annual sales growth as traditional retailers struggle and is predicted to surpass Macy’s (NYSE: M) as America’s top apparel seller next year. Analysts at Morgan Stanley found that the department store share of the apparel market has fallen by $30 billion over the last decade while Amazon and other online retailers have picked up over $28 billion in market share over the same period. #-ad_banner-#Retailers like Sears (Nasdaq: SHLD) and J.C. Penney (NYSE: JCP) have all but vanished and other retail segments are feeling the squeeze. The $397 billion e-commerce leader has already started ramping up to steal sales from brick-and-mortar stores this holiday season with its second annual Prime Day. Research firm Forrester estimates that Amazon accounted for 60% of all online sales growth in the United States last year. But not all retailers may be feeling the bite of Amazon’s growth story. A few may even be able to beat Amazon on the ground and in the ‘net. Retail Categories And Companies Set To Win Some retail categories may fair better than others… Read More

Baron Rothschild’s 18th century rule that, “The time to buy is when there’s blood in the streets,” is just as applicable today as it was 300 years ago. But today, we’re nearly eight years into a bull market and it’s tough finding value in stocks, let alone bargains around panic-selling. The S&P 500 has returned 273% adjusting for dividends since the 2009 low and individual sectors are trading at bubble-worthy highs. Even the healthcare sector, one of the worst performing of the year, has jumped 360% since 2009 and trades at 16-times trailing earnings. #-ad_banner-#But investors in one sector are… Read More

Baron Rothschild’s 18th century rule that, “The time to buy is when there’s blood in the streets,” is just as applicable today as it was 300 years ago. But today, we’re nearly eight years into a bull market and it’s tough finding value in stocks, let alone bargains around panic-selling. The S&P 500 has returned 273% adjusting for dividends since the 2009 low and individual sectors are trading at bubble-worthy highs. Even the healthcare sector, one of the worst performing of the year, has jumped 360% since 2009 and trades at 16-times trailing earnings. #-ad_banner-#But investors in one sector are in full panic-mode. That sector is facing a perfect storm of fundamental and political issues. Several companies within the group are facing threats to their very existence. Few investors are talking about the long-term upside in the group but one investment provides the opportunity to reduce your risk while still benefiting from the rebound. Dark Clouds Over European Banking European banks have lagged their U.S. peers since the 2009 recession. The slower economic recovery in the EU and continuing problems in Greece have weighed on the sector. While the European Central Bank was able to step in and avoid… Read More

The internet turned 47 years old this year. That’s if you count from the first computer-to-computer linkup on ARPANET in 1969. Even counting from the creation of the world wide web in 1989, the online revolution would be getting close to its 30s. While few companies are trading at the dizzying heights of the dot-com bubble, there are still quite a few names that trade as ‘growth’ stocks on the assumption of years left to internet growth. But what if the internet stops growing? #-ad_banner-#Nearly everyone in the United States (89%) is connected and internet penetration is as high as… Read More

The internet turned 47 years old this year. That’s if you count from the first computer-to-computer linkup on ARPANET in 1969. Even counting from the creation of the world wide web in 1989, the online revolution would be getting close to its 30s. While few companies are trading at the dizzying heights of the dot-com bubble, there are still quite a few names that trade as ‘growth’ stocks on the assumption of years left to internet growth. But what if the internet stops growing? #-ad_banner-#Nearly everyone in the United States (89%) is connected and internet penetration is as high as 94% of the population in the United Kingdom. What happens when the growth that investors are assuming to drive internet-related companies just isn’t there? Turns out it may already be happening. A new study by Adobe suggests that internet growth has slowed considerably or even stopped altogether and it could be disastrous for a few tech names. The Internet Is Dead, Long Live The Internet A report by Adobe suggests that internet traffic may have reached its peak as fewer net new people come online every year. The company’s first Advertising Demand Report was compiled from more than 1.1… Read More